BRADEN LAMMERS
Braden.Lammers@newsandtribune.com
June 18, 2009 01:43 pm
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A dispute in contract negotiations between Norton Healthcare and Anthem Blue Cross and Blue Shield may force some Southern Indiana residents to search for new doctors.
The deadline for reaching an agreement is set for the end of the month — June 30 — and was originally terminated by Norton in December 2008. At the time Norton terminated the contract, a provision allowed the two sides 180 days to renegotiate a deal.
“We believe six months would be ample time to negotiate a new contract that addresses both the administrative problems and the inadequate reimbursement rates, and it should have been, if Anthem had chose to engage in meaningful negotiations,” said a letter sent out by Norton to Anthem subscribers.
The Anthem-Norton contract that was terminated was negotiated in 2007 and wasn’t set to expire until Sept. 30, 2010.
Norton exercised the provision to terminate because “of Anthem’s serious administrative problems [poor service to patients, physicians, employers, brokers and others, as well as slow/inaccurate payments and poor service to our provider network]; and because Anthem’s rates were considerably less than those we received from other private insurance companies,” as stated in the letter.
Part of the dispute is over the standard that Norton has with other insurance carriers. It has renewed contracts with five of six top insurers in the area using a policy of comparable rates, similar service standards and similar contract language, according to the letter. Coupled with Anthem’s rates being below that of other insurers pushed Norton to opt out of its current deal and ask for an increase in rates.
“This dispute is all about the cost of health care,” said Tony Felts, communications director for Anthem in an e-mail. “While the contract that’s currently in place allows for a 5.5 percent increase in reimbursement, Norton wants out of the contract early unless it receives an increase of 20 percent or more.”
“Giving in to Norton’s unreasonable demands would dramatically increase medical costs for Anthem members and employers,” said a letter sent out by Anthem to local employers.
Norton denies a claim by Anthem that the contract it is seeking will increase the annual health care costs to employers by nearly 20 percent.
“We are looking at it and what the net effect would be for the individual payers,” said Jim Meyers, associate vice president of managed care for Norton. “We are not looking for 20 percent.”
The change for employers would increase on average by less than 2 percent, according to Norton.
The other diffusive factor in the negotiations is the service provided by Anthem.
“We just have a lot of problems with Anthem on the administrative side,” said Steve Menaugh, vice president of communications and public relations for Norton.
“It takes Anthem 37 percent longer to pay on average compared to [similar] providers,” Meyers said.
For medical advantage claims, the delay was substantially worse, taking 253 percent longer, and Anthem is 80 percent of all of Norton’s underpayments, he said.
Again, Anthem disagreed.
“Anthem processes more than 96 percent of all claims in an accurate and timely manner, while denying a very small number of claims,” Anthem’s letter said.
Anthem and Norton have a history of terminating contracts. Originally, the two agreed to terms in October 2007. The contract was terminated because of many of the same administrative problems in April 2008, Meyers said. But the sides were able to reach an agreement in September 2008, in good faith that the problems would be addressed.
“Our goal is to be in the Anthem network; it just has to be reasonable,” Meyers said.
Norton is seeking similar rates, for similar service, as provided by other insurers, Meyers said.
More than 85 locations in the Louisville metro and Southern Indiana area will be affected should the two sides fail to reach an agreement. The health care centers affected include some of the largest providers in the area, including Kosair Children’s Hospital, Norton Audubon Hospital and Norton Brownsboro Hospital, set to open in August.
Norton Healthcare provides services to about 1.5 million people — nearly one in every two people — in greater Louisville, according to Norton’s letter.
“Anthem wants to maintain a positive working relationship with Norton,” Felts said. “We want them to be in our network. We have offered to engage in nonbinding mediation with an unbiased, third-party mediator, but unfortunately Norton has refused. We’re hopeful of resolving our differences before the deadline.”
As of Tuesday, Norton had still not received a proposal from Anthem and it was the first time mediation was officially asked for, Meyers said.
NORTON FACILITIES IN CLARK COUNTY
• Louisville Oncology Jeffersonville/Clarks Medical Center — 301 W. 13th St., Jeffersonville
• Norton Community Medical Association Clarksville — 2051 Clevidence Blvd., Clarksville
• Norton Community Medical Association Jeffersonville — 3118 E. 10th St., Jeffersonville
• Norton Immediate Care Center Clarksville — 2051 Clevidence Blvd., Clarksville
• Norton Immediate Care Center Jeffersonville — 3118 E. 10th St., Jeffersonville
• Norton Rehabilitation Physicians — 3118 E. 10th St., Jeffersonville
ANTHEM BLUE CROSS AND BLUE SHIELD
• The nation’s oldest and largest family of health benefits companies.
• Consists of 39 Blue Cross and Blue Shield companies.
• Collectively employs 150,000 people.
• Nationwide more than 90 percent of hospitals and 80 percent of physicians contract with Blue Cross and Blue Shield companies.
NORTON HEALTHCARE
• Includes four large hospitals, 11 Norton Immediate Care Centers and more than 60 physicians.
• The area’s leading health care provider.
• A not-for-profit organization.
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